It follows a lengthy investigation by the CMA over concerns that there would be ‘a substantial lessening of competition’ in the UK gambling market if the merger was allowed to take place.
Both Ladbrokes Coral and GVC Holdings shareholders approved the £4bn merger last month which GVC CEO Kenneth Alexander called “an exciting opportunity, bringing together industry leading online and retail brands.” However, the final approval for the merger rested with the CMA.
Addressing the competition concerns, the CMA said that: “GVC has a small presence in the UK and only offers services online. The CMA has found that GVC and Ladbrokes are not close rivals and there are many other providers of betting and gaming services online.
“The CMA looked closely at betting services for individual sports and individual games but found that, in all cases, there will be enough rivals to the merged entity to prevent price increases or a reduced quality of service as a result of the merger.”
A key constituent of the merger negotiations was the UK Governments expected clampdown on fixed odds betting terminals, which are currently form a large part of the income from Ladbrokes retail premises.
On Monday the Gambling Commission released the results of its twelve week consultation, calling for a cut in the maximum stake to £2 on slots style fixed odds betting terminals while also cutting the maximum stake in non slots fixed odds betting terminals to £30.
These recommendations have not been adopted by the Government, but could be seen as a happy medium between more stringent measures which adversely harm the gambling industry and being seen to be addressing the damaging effects of these controversial terminals.
Provisional estimates state that Ladbrokes Coral could lose over 3,000 shops in the UK at a cost of 1,500 jobs with any cuts. GVC Holdings factored these rumoured cuts into their offer for the business, with its final purchase price expected to fluctuate as a result.
